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Elmira Savings Bank Reports Second Quarter Earnings

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ELMIRA, N.Y., July 19, 2017 (GLOBE NEWSWIRE) --

Elmira Savings Bank (NASDAQ:ESBK)

Highlights

  • Net income was $1,108,000 and $2,187,000 for the three and six months ended June 30, 2017 compared to $1,057,000 and $2,093,000 for the same periods in 2016.
  • Diluted earnings per share were $.28 per share and $.59 per share for the three and six months ended June 30, 2017 compared to $.30 per share and $.60 per share for the same periods in 2016. 
  • Return on average assets was .79% and .78% for the three and six months ended June 30, 2017 compared to .73% for both of the same periods in 2016.
  • Return on average equity was 7.01% and 7.35% for the three and six months ended June 30, 2017 compared to 7.65% and 7.58% for the same periods in 2016.

"We are pleased with the year-over-year improvement in earnings, highlighted by an increase in our net interest margin which has risen by 16 basis points year-to-year to 3.34% for the first half of 2017," said Thomas M. Carr, President and CEO.  Carr continued, "In addition to the second quarter earnings improvement, we are also pleased to have successfully completed the capital raise and recently opened our new branch office in Ithaca."

Net Income

Net income totaled $2,187,000 for the six months ended June 30, 2017, an increase of $94,000 or 5% from the $2,093,000 of net income recorded for the same period in 2016.  This increase was the net result of an increase in net interest income of $205,000, a decrease in noninterest expense of $129,000, and a decrease in the provision for loan losses of $30,000, offset by a decrease in noninterest income of $176,000 and an increase in tax expense of $94,000.

Net income totaled $1,108,000 for the three months ended June 30, 2017, an increase of $51,000 or 5% from the $1,057,000 recorded for the same period in 2016.  This increase was the net result of an increase in net interest income of $132,000 and a decrease in noninterest expense of $110,000, offset by a decrease in noninterest income of $86,000, an increase in the provision for loan losses of $70,000, and an increase in tax expense of $35,000.

Basic and diluted earnings per share for the six months ended June 30, 2017 were both $.59 per share compared to $.60 per share for both for the same period in 2016.  Basic and diluted earnings per share for the three months ended June 30, 2017 were both $.28 per share compared to $.31 per share and $.30 per share for the same period in 2016.

The decrease in earnings per share and return on average equity for both the three and six months ending June 30, 2017 versus the same periods in 2016, despite the higher levels of net income for 2017, reflects the impact of the private placement of 548,430 common shares in April 2017.  

Net Interest Margin

The net interest margin for the six months ended June 30, 2017 was 3.34% compared to 3.18% for the same period in 2016.  The yield on average earning assets was 4.13% for the six months ended June 30, 2017 compared to 4.07% for the same period in 2016.  The average cost of interest-bearing liabilities was .94% for the six months ended June 30, 2017 compared to 1.04% for the same period in 2016.

The net interest margin for the three months ended June 30, 2017 was 3.36% compared to 3.17% for the same period in 2016.  The average yield on earning assets was 4.15% for the three months ended June 30, 2017 compared to 4.06% for the same period in 2016.  The average cost of interest-bearing liabilities was .94% for the three months ended June 30, 2017 compared to 1.04% for the same period in 2016.

Assets

Total assets increased $882,000 or 0.2% to $574.3 million at June 30, 2017 compared to $573.5 million at December 31, 2016.  Loans, including loans held for sale, decreased 0.7% to $456.5 million at June 30, 2017 compared to December 31, 2016.  The available-for-sale investment portfolio decreased $5.2 million from December 31, 2016 to June 30, 2017.

Nonperforming Loans

Our nonperforming loans to total loans ratio has decreased to 0.74% at June 30, 2017 from 1.11% at December 31, 2016.  Net loan charge-offs to average loans for the six months ended June 30, 2017 of 0.07% increased from 0.04% for the six months ended June 30, 2016.  The allowance for loan losses was 0.95% of total loans at June 30, 2017 and 0.94% of total loans at December 31, 2016.

Liabilities

Deposits total $460.1 million at June 30, 2017, a decrease of $9.4 million or 2.0%.  The $9.4 million decrease consists of a $13.2 million decrease in time deposits and a $4.0 million decrease in money market accounts, offset by an increase in interest bearing transaction accounts of $1.1 million, a $47,000 increase in savings accounts, and a $6.7 million increase in noninterest-bearing accounts.  Borrowed funds remained unchanged from December 31, 2016 at $42.0 million.

Shareholders' Equity

Shareholders' equity increased $9.6 million to $65.2 million at June 30, 2017 compared to December 31, 2016.  The increase in shareholders' equity includes the impact of the gross $9.5 million received from the private placement of 548,430 common shares in April 2017.  The current level of shareholders' equity equates to a book value per share of $16.77 at June 30, 2017, compared to $16.74 at December 31, 2015.  Dividends declared and paid for common shareholders were $0.23 and $0.46 for the three and six months ended for both June 30, 2017 and 2016.

Elmira Savings Bank, with $574.3 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a state-chartered bank with six offices in Chemung County, NY; three offices in Tompkins County, NY; two offices in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County; and a loan center in Broome County, NY.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve the risks and uncertainties, including the timely availability and acceptance of Bank products, the impact of competitive products and pricing, the management of growth, and other risks detailed from time to time in the Bank's regulatory reports.

 

               
ELMIRA SAVINGS BANK  
CONSOLIDATED BALANCE SHEET  
(unaudited)  
                   
(in thousands, except for share and per share data)   June 30,   December 31,      
          2017       2016     % Change  
ASSETS                  
                   
Cash and due from banks     $   31,542     $   24,195     30.4 %  
Federal funds sold and other short-term investments       98         99     -1.0 %  
  Total cash and cash equivalents         31,640         24,294     30.2 %  
                   
Securities available for sale, at fair value       27,383         32,581     -16.0 %  
Securities held to maturity - fair value $8,389              
  at June 30, 2017 and $8,679 at December 31, 2016       8,245         8,519     -3.2 %  
Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost     9,954         9,811     1.5 %  
                   
Loans held for sale         4,172         3,597     16.0 %  
                   
Loans receivable           452,322         455,931     -0.8 %  
Less: Allowance for loan losses         4,298         4,263     0.8 %  
  Net loans           448,024         451,668     -0.8 %  
                   
Premises and equipment, net         15,248         12,634     20.7 %  
Bank-owned life insurance         13,783         13,592     1.4 %  
Accrued interest receivable         990         1,552     -36.2 %  
Intangible assets, net         9         20     -55.0 %  
Goodwill           12,320         12,320     0.0 %  
Other assets           2,564         2,862     -10.4 %  
  Total assets       $   574,332     $   573,450     0.2 %  
                   
LIABILITIES AND SHAREHOLDERS' EQUITY              
                   
Deposits       $   460,140     $   469,547     -2.0 %  
Borrowings           42,000         42,000     0.0 %  
Other liabilities           6,912         6,180     11.8 %  
  Total liabilities           509,052         517,727     -1.7 %  
                   
Shareholders' equity:                
Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares            
  authorized; 10,000 shares issued at June 30, 2017 and at December 31, 2016     9,700         9,700     0.0 %  
Common stock, $1 par value; authorized 5,000,000 shares; 3,404,925 shares             
  issued at June 30, 2017 and 2,844,670 shares issued at December 31, 2016     3,405         2,845     19.7 %  
Additional paid-in capital         50,080         41,644     20.3 %  
Retained earnings         4,749         4,407     7.8 %  
Treasury stock, at cost - 93,883 shares at June 30, 2017            
  and 98,118 shares at December 31, 2016       (2,802 )       (2,907 )   -3.6 %  
Accumulated other comprehensive income       96         (19 )   -605.3 %  
  Total Elmira Savings Bank shareholders' equity       65,228         55,670     17.2 %  
Noncontrolling interest         52         53     -1.9 %  
  Total shareholders' equity         65,280         55,723     17.2 %  
  Total liabilities and shareholders' equity   $   574,332     $   573,450     0.2 %  
                   

 

ELMIRA SAVINGS BANK
CONSOLIDATED  STATEMENT OF INCOME 
(unaudited)
                         
    Three Months Ended   Six Months Ended    
    June 30,   June 30,    
(in thousands, except for per share data)     2017     2016   % Change     2017     2016   % Change
                         
Interest and dividend income:                         
  Interest and fees on loans   $   4,789   $   4,744   0.9 %   $   9,524   $   9,473   0.5 %
  Interest and dividends on securities                        
  Taxable       228       242   -5.8 %       472       527   -10.4 %
  Non-taxable       156       205   -23.9 %       345       424   -18.6 %
  Total interest and dividend income       5,173       5,191   -0.3 %       10,341       10,424   -0.8 %
                         
Interest expense:                        
  Interest on deposits       720       763   -5.6 %       1,450       1,497   -3.1 %
  Interest on borrowings       267       374   -28.6 %       532       773   -31.2 %
  Total interest expense       987       1,137   -13.2 %       1,982       2,270   -12.7 %
Net interest income       4,186       4,054   3.3 %       8,359       8,154   2.5 %
Provision for loan losses       155       85   82.4 %       195       225   -13.3 %
Net interest income after provision for loan losses       4,031       3,969   1.6 %       8,164       7,929   3.0 %
                         
Noninterest income:                        
  Service fees       361       354   2.0 %       740       702   5.4 %
  Gain on sale of loans held for sale       686       749   -8.4 %       1,269       1,271   -0.2 %
  Gain on sale of securities       -       -           -       180   -100.0 %
  Other service fees       186       186   0.0 %       362       366   -1.1 %
  Earnings on bank-owned life insurance        95       108   -12.0 %       191       205   -6.8 %
  Other       24       41   -41.5 %       51       65   -21.5 %
  Total noninterest income       1,352       1,438   -6.0 %       2,613       2,789   -6.3 %
                         
Noninterest expense:                        
  Salaries and benefits       1,902       1,969   -3.4 %       3,861       3,896   -0.9 %
  Net occupancy       360       353   2.0 %       772       722   6.9 %
  Equipment       306       301   1.7 %       618       576   7.3 %
  Marketing and public relations       207       192   7.8 %       407       393   3.6 %
  Professional fees       184       194   -5.2 %       352       374   -5.9 %
  Other       822       882   -6.8 %       1,599       1,777   -10.0 %
  Total noninterest expense       3,781       3,891   -2.8 %       7,609       7,738   -1.7 %
Income before income taxes       1,602       1,516   5.7 %       3,168       2,980   6.3 %
Income taxes       494       459   7.6 %       981       887   10.6 %
Net income       1,108       1,057   4.8 %       2,187       2,093   4.5 %
Less: Net income attributable to noncontrolling interest       -       -     -         -       -     -  
                         
Net income attibutable to Elmira Savings Bank       1,108       1,057   4.8 %     2,187     2,093   4.5 %
                         
Dividend on preferred stock       225       225   0.0 %       450       450   0.0 %
Income available to common shareholders   $   883   $   832   6.1 %   $   1,737   $   1,643   5.7 %
                         
                         
Basic earnings per share   $   0.28   $   0.31   -9.7 %   $   0.59   $   0.60   -1.7 %
                         
Diluted earnings per share   $   0.28   $   0.30   -6.7 %   $   0.59   $   0.60   -1.7 %
                         
Weighted average shares outstanding - basic       3,154,094       2,717,506   16.1 %       2,947,828       2,716,710   8.5 %
                         
Weighted average shares outstanding - diluted       3,170,013       2,734,970   15.9 %       2,964,920       2,733,992   8.4 %
                         
Dividends per share   $   0.24   $   0.23   4.3 %   $   0.47   $   0.46   2.2 %
                         

 

ELMIRA SAVINGS BANK    
AVERAGE BALANCES AND INTEREST RATES    
                             
(Dollars in Thousands) For the Three Months Ended    
  June 30, 2017     June 30, 2016    
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate    
Loans $   450,724   $   4,789     4.24 % $   457,695   $   4,744     4.15 %
Short-term investments     459       1     0.81         691       -      0.20    
Securities     47,115       383     3.25         53,202       447     3.36    
Total interest-earning assets     498,298       5,173     4.15         511,588       5,191     4.06    
                             
Noninterest-earning assets     65,224                 53,756            
                             
TOTAL ASSETS $   563,522             $   565,344            
                             
LIABILITIES AND SHAREHOLDERS' EQUITY                            
Interest-bearing deposits $   378,473   $   720     0.76     $   384,003   $   763     0.80    
Borrowings     42,000       267     2.52         52,055       374     2.84    
Total interest-bearing liabilities     420,473       987     0.94         436,058       1,137     1.04    
                             
Noninterest-bearing liabilities     79,670                 73,662            
Shareholders' equity     63,379                 55,624            
                             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   563,522             $   565,344            
Interest rate spread           3.21 %             3.02 %  
Net interest income/margin     $   4,186     3.36 %       $   4,054     3.17 %  
                             

 

ELMIRA SAVINGS BANK  
AVERAGE BALANCES AND INTEREST RATES  
                           
(Dollars in Thousands) For the Six Months Ended  
  June 30, 2017     June 30, 2016  
ASSETS: Average Balance   Interest   Average Rate     Average Balance   Interest   Average Rate  
Loans $   451,952   $   9,524     4.22 % $   455,762   $   9,473     4.16 %
Short-term investments     1,153       3     0.53         536       -      0.19  
Securities     48,399       814     3.37         56,416       951     3.37  
Total interest-earning assets     501,504       10,341     4.13         512,714       10,424     4.07  
                           
Noninterest-earning assets     62,457                 50,882          
                           
TOTAL ASSETS $   563,961             $   563,596          
                           
LIABILITIES AND SHAREHOLDERS' EQUITY                          
Interest-bearing deposits $   383,352   $   1,450     0.76     $   379,304   $   1,497     0.79  
Borrowings     42,102       532     2.51         55,526       773     2.76  
Total interest-bearing liabilities     425,454       1,982     0.94         434,830       2,270     1.04  
                           
Noninterest-bearing liabilities     78,517                 73,255          
Shareholders' equity     59,990                 55,511          
                           
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $   563,961             $   563,596          
Interest rate spread           3.19 %             3.03 %
Net interest income/margin     $   8,359     3.34 %       $   8,154     3.18 %
                           

 

      Quarter Ended
(Dollars in Thousands, Except Per Share Data)   6/30/2017   3/31/2017   12/31/2016   9/30/2016   6/30/2016  
                       
Operating Data                      
                       
  Net income $   1,108   $   1,079   $   1,042   $   1,202   $   1,057    
  Net interest income     4,186       4,173       4,155       4,211       4,054    
  Provision for loan losses     155       40       175       87       85    
  Net security gains     -        -        -        -        -     
  Non-interest income, ex. Net security gains     1,352       1,261       1,395       1,716       1,438    
  Non-interest expense     3,781       3,828       3,888       3,976       3,891    
                       
Performance Statistics                      
                       
  Net interest margin   3.36 %   3.32 %   3.23 %   3.24 %   3.17 %  
  Annualized return on average assets   0.79 %   0.78 %   0.73 %   0.84 %   0.75 %  
  Annualized return on average equity   7.01 %   7.74 %   7.38 %   8.54 %   7.65 %  
  Annualized net loan charge-offs to avg loans   0.13 %   0.01 %   0.20 %   0.05 %   0.01 %  
  Net charge-offs (recoveries)     144       16       231       53       14    
  Efficiency ratio   68.3 %   70.4 %   70.1 %   67.1 %   70.8 %  
                       
Per Share Data                      
                       
  Basic earnings per share $   0.28   $   0.31   $   0.30   $   0.36   $   0.31    
  Diluted earnings per share     0.28       0.31       0.30       0.36       0.30    
  Dividend declared per share     0.23       0.23       0.23       0.23       0.23    
  Book value     16.77       16.82       16.74       16.80       16.69    
  Common stock price:                      
    High      21.75       21.75       22.25       21.50       20.10    
    Low     19.65       20.28       18.50       18.85       18.06    
    Close     20.30       21.60       20.45       19.91       19.66    
  Weighted average common shares:                      
    Basic      3,154       2,739       2,731       2,724       2,718    
    Fully diluted     3,170       2,757       2,750       2,741       2,735    
  End-of-period common shares:                      
    Issued     3,405       2,850       2,845       2,839       2,832    
    Treasury     94       94       98       98       98    
                           
                           
Financial Condition Data:                      
General                      
  Total assets $   574,332   $   556,644   $   573,450   $   567,450   $   574,721    
  Loans, net     448,024       446,223       451,668       455,251       463,104    
  Intangibles     12,329       12,334       12,340       12,349       12,360    
  Total deposits     460,140       450,376       469,547       463,414       470,462    
                                     
    Noninterest-bearing     77,027       71,870       70,330       72,102       70,803    
                                     
    Savings     70,668       70,300       70,621       69,019       69,159    
    NOW     86,896       86,633       85,822       86,787       121,875    
    Money Market     24,859       27,697       28,889       25,715       25,172    
    Time deposits     200,690       193,876       213,885       209,791       183,453    
    Total interest-bearing deposits     383,113       378,506       399,217       391,312       399,659    
                                   
  Shareholders' equity     65,280       56,103       55,723       55,792       55,382    
                                   
Asset Quality                      
                                   
  Non-performing assets $   3,494   $   4,234   $   5,289   $   5,345   $   5,622    
  Non-performing assets to total assets   0.61 %   0.76 %   0.92 %   0.94 %   0.98 %  
  Allowance for loan losses     4,298       4,287       4,263       4,319       4,285    
  Allowance for loan losses to total loans   0.95 %   0.95 %   0.94 %   0.94 %   0.92 %  
  Allowance for loan losses to                       
    non-performing loans   129.15 %   105.93 %   84.80 %   85.00 %   80.41 %  
  Non-performing loans to total loans   0.74 %   0.91 %   1.11 %   1.12 %   1.15 %  
                                   
Capitalization                      
                                   
  Shareholders' equity to total assets   11.37 %   10.08 %   9.72 %   9.83 %   9.64 %  
                           

For further information contact:
Thomas M. Carr, President & CEO
Elmira Savings Bank
333 East Water Street
Elmira, New York  14901
(607) 735-8660
tcarr@elmirasavingsbank.com

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